Cellular telephone service is widely available in major population centers through competing cellular carriers. The owner of each cellular "set" is a customer of a particular "home" cellular carrier and is assigned to a "home" switching area. Each cellular set has a unique manufacturer's identification number, Electronic Serial Number (ESN), which is employed in making calls. Additionally, the "home" cellular carrier assigns a telephone number in the national numbering plan to each set. A cellular set may "roam" beyond its "home" area; however, "roam" service to a set is generally provided by foreign carriers that have a working billing agreement with the set's home carrier. Certain carriers permit a roam set to be manually registered for credit card billing for service rendered by the carrier.
There are several unique aspects of cellular telephone service which are in stark contrast to land telephone service.
In land telephone service, there are dominant carriers with little or no overlap in the provision of basic switching services in any geographical area. In cellular telephone service there can be two or more cellular carriers serving the same geographical area.
In land telephone service, a carrier provides service to a fixed physical address, and a deposit may be required to assure the payment of monthly charges. However, in cellular service, although each cellular "set" has a unique manufacturer's identification number, it is extremely difficult for a carrier to get a good physical fix on customers who choose to avoid payment for services. Cellular sets can be moved throughout the country and registered with different cellular carriers. Many cellular customers maintain service over short periods of time and switch from carrier to carrier, often without paying for prior services. Such losses to carriers lead to higher charges for all customers.
Fraud and billing delays associated with "roam" cellular sets has created hardship for cellular carriers. Since each cellular carrier is responsible for long distance charges placed as a 1+ call, many cellular carriers, as a matter of operating policy, will not permit a roam set to place 1+ long distance call. This policy is dictated by fraud associated with many roam sets; and the long delay in processing and receiving payment for billing to a roam set customer. Although manual temporary registration of a roam set is available in some areas, the registration and billing processes are so cumbersome that there is little reason for a carrier to offer the option or for a customer to use the option.
Roam customers are frustrated by such limited available service while they are outside the service area of their home carrier; and by their inability to receive service in cities where no agreement exists with their home carrier.
As in land telephone systems, service resellers create operational challenges for a carrier. In cellular telephone systems, there are two general classes of service resellers who buy air time at bulk rates and charge their customers at a premium rate.
The first class of reseller, purchases a block of numbers from a carrier and assigns those numbers to sets owned by customers who buy service for substantial periods of time e.g., months or even years. A reseller sells service to such established customers and assumes the risk of loss associated with all calls processed by the customer. The reseller advises the carrier when to activate and deactivate a set in the cellular switch. Typically, the reseller sends a FAX message to the cellular carrier with orders to activate and/or deactivate numbers within the reseller's block of numbers. This class of reseller is generally billed monthly for all air and long distance services; and prompt payment is expected by the cellular carrier. With such infrequent billing, a reseller cannot take advantage of cyclic billing which spreads the billing activities and receipts through a month.
The second class of reseller, owns sets which are leased to a customer for short periods of time e.g., daily or weekly. When a set is rented, the reseller requests that the set be activated in the switch; and when the set is returned the reseller requests deactivation of the set. In this type of reseller service, there is a need for "immediate billing" at the time that a set is returned. Since a reseller, generally, does not have immediate access to detailed call records, such as those that are available at a PBX of a hotel in a land telephone system, the reseller has no way of rating calls, for either air time or long distance service.
In land telephone systems, a company can easily control its telephone expenses through various call screening and billing features which are available in PBX and other business telephone systems.
However, employees who have company provided cellular sets tend to ignore the relatively high cost of cellular air time and, thus, incur large monthly bills. Because of their inability to control expenses, many companies severely limit the number of cellular sets that they place in service. From the viewpoint of both the carriers and the companies who buy cellular services, there is a definite need for services which help a company contain their cellular communication expenses.